The SEC alleged that Goldman Sachs (GS, Fortune 500) failed to disclose to investors in a pool of subprime mortgages that Paulson & Co., one of the most influential hedge funds in the world, was making bets against the security.

If the SEC's claim is true, this is a major transgression. Even if it turns out that the wrongdoing was the work of one rogue employee -- the SEC specifically named Goldman Vice President Fabrice Tourre -- it is clear that Goldman has some explaining to do and must pay.

Since the credit markets imploded a few years ago, many financial experts have argued that Wall Street firms were coddled by Washington and were being rewarded with bailouts instead of being punished for their role in the subprime mortgage crisis.

Even former Washington Mutual CEO Kerry Killinger, who appeared before Congress earlier this week to explain the collapse of WaMu, the largest bank failure in history, claimed that there was a clubby culture on Wall Street and Washington. His Seattle-based savings and loan apparently was not part of the financial sector's too-big-to-fail cool kids clique.

I have no sympathy for Killinger. His remarks are clearly of the sour grapes variety because he got pushed out of his job before WaMu ultimately was seized by the FDIC and sold on the cheap to JPMorgan Chase (JPM, Fortune 500) -- one of the members of Wall Street's popular crowd. Heck, you could argue that Jamie Dimon is the star quarterback on the varsity football team.

But Killinger did raise an interesting point that I think is shared by many American taxpayers who are still seething about the hundreds of billions of dollars loaned to big banks to keep them afloat. The notion that big Wall Street banks had to be protected at all costs rings hollow when you look at all the D.C. ties to them.

And Goldman Sachs has the most Washington connections of them all, which makes the SEC's targeting of it that much more significant.

Former Treasury Secretary Henry Paulson, an architect of the bailout, used to be a Goldman Sachs CEO. Neel Kashkari, a former Goldman Sachs vice president, was put in charge of the Troubled Asset Relief Program, or TARP, by Paulson. (Kashkari has since left the Treasury.)

And if that wasn't enough, the controversial decision by the government to prop up insurance company AIG (AIG, Fortune 500) with the biggest bailout of them all has been widely criticized as a sort of second-derivative rescue of Goldman since it was on the hook to the tune of nearly $13 billion in so-called counterparty risk if AIG failed.

You don't need to be a lunatic fringe conspiracy theorist to connect the dots and declare that the U.S. government's best interests and Goldman Sachs' best interests were closely intertwined.

Goldman, in a statement Friday, defended itself, saying that "the SEC's charges are completely unfounded in law and fact."

Only time will tell if Goldman is correct and the SEC is barking up the wrong tree. But investors are presuming guilt. Shares of Goldman plummeted 11% Friday afternoon and it dragged down the rest of the banking sector -- shares of Morgan Stanley (MS, Fortune 500) and Germany's Deutsche Bank (DB) were particularly hard hit -- and broader market with it.

Of course, the last thing that Wall Street needs now is a regulatory witch hunt to kill off the market rally. But this seems to be more of a case of where there's smoke, there's fire. And that's why the SEC deserves a healthy round of applause.

The SEC has taken a lot of lumps (including from me) for not doing its job effectively. Part of that probably had to do with the fact that the agency was woefully underfunded and understaffed.

But it also seems that while state attorneys general were more active in investigating the actions of big banks, some federal regulators were simply asleep at the wheel. Instead of going after the big Wall Street powerhouses during the peak of the financial meltdown, the SEC was focusing on easier targets such as short-sellers.

Here's hoping that this is the dawn of a new age at the SEC, one where the agency is unafraid to crack down on the most egregious cases of wrongdoing on Wall Street at the firms that have the most influence.

- The opinions expressed in this commentary are solely those of Paul R. La Monica.